What is the ruling on leasing with the option to purchase?
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The questioner : Regarding the issue of leasing with the option to purchase, O Shaykh?
The Shaykh : Yes.
The questioner : I do not know.
The Shaykh : And what is this leasing with the option to purchase?
The questioner : There is a car agency, O Shaykh, that comes to them and you lease a car, paying a down payment, then you start the monthly installment, and the car is in the company's name, so you do not own it and cannot sell it; you can only drive it with their permission. And at the end, some companies require a final payment so that you can own the car.
The Shaykh : Yes.
The questioner : And some are content with just paying the installments, so I do not know about this form?
The Shaykh : And why do they not say, "We leased you the car for a period of three years, for example, and after the three years are complete, you or someone else can buy it"? Why do they not say this?
The questioner : They have allocated it to you, O Shaykh.
The Shaykh : It does not contradict the fact that they allocated it to you; if they lease me the car, I cannot lease it out, but do you know the reason? They are clever; they want it to be your responsibility if it is damaged during this period, because it is your property, sold to you.
The questioner : Yes, indeed.
The Shaykh : That is one point. Second, if they lease it for a thousand riyals a month, they charge you two thousand riyals because you will own it in the end. For this reason, this transaction was under review and study by the Committee of Senior Scholars, and perhaps, if Allah wills, they will issue a fatwa on it soon. So you should not use it until the fatwa is issued, and then it is permissible.
The Shaykh : Yes.
The questioner : I do not know.
The Shaykh : And what is this leasing with the option to purchase?
The questioner : There is a car agency, O Shaykh, that comes to them and you lease a car, paying a down payment, then you start the monthly installment, and the car is in the company's name, so you do not own it and cannot sell it; you can only drive it with their permission. And at the end, some companies require a final payment so that you can own the car.
The Shaykh : Yes.
The questioner : And some are content with just paying the installments, so I do not know about this form?
The Shaykh : And why do they not say, "We leased you the car for a period of three years, for example, and after the three years are complete, you or someone else can buy it"? Why do they not say this?
The questioner : They have allocated it to you, O Shaykh.
The Shaykh : It does not contradict the fact that they allocated it to you; if they lease me the car, I cannot lease it out, but do you know the reason? They are clever; they want it to be your responsibility if it is damaged during this period, because it is your property, sold to you.
The questioner : Yes, indeed.
The Shaykh : That is one point. Second, if they lease it for a thousand riyals a month, they charge you two thousand riyals because you will own it in the end. For this reason, this transaction was under review and study by the Committee of Senior Scholars, and perhaps, if Allah wills, they will issue a fatwa on it soon. So you should not use it until the fatwa is issued, and then it is permissible.